The Sizewell A and B nuclear power stations, operated by Electricite de France SA (EDF), in Sizewell, UK, on Friday, Jan. 26, 2024. Photographer: Chris Ratcliffe/Bloomberg via Getty Images
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The U.K. was the birthplace of commercial nuclear energy, but now generates just a fraction of its power from it — big investments are underway to change that.
The country once had morenuclear power stations than the U.S.,USSRand France — combined. It was a global producer until 1970 buthasn’tcompleted a new reactor since Sizewell B in 1995.
Today, the country takes the crown not for being a leader in atomic energy, but for being themost expensive place in the worldto build nuclear projects.
Nuclear energy accountedfor just14%of the U.K.’s power supplyin 2023, according to themost recent datafrom the International Energy Agency, trailingitsEuropeanpeersand well behind frontrunner France at65%.
There is ambition to change that and have a quarter of the U.K.’s power come from nuclear by 2050. Nuclear is considered an attractive betbecause it’s alow-carbon, constant energy sourcethatcan act as a baseload to complement intermittent sources like renewables.
“There’s a very clear momentum that has been observed,” Doreen Abeysundra, founder of consultancy Fresco Cleantech, told CNBC. It’s in part due to geopolitical tensions, which pushed energy security and independence onto publicagendas.
However, the U.K.’s Nuclear Regulatory Taskforce called for urgent reforms afteridentifying “systemic failures”in thecountry’s nuclear framework. Itfound that fragmented regulation, flawedlegislationand weak incentives led the U.K. to fall behind as a nuclear powerhouse. Thegovernmentcommitted to implementing the taskforce’s guidance and is expectedtopresent a plan to do sowithinthreemonths.
Going big – or small
The U.K.is spreading its bets across tried-and-tested large nuclear projects and smaller, next-generation reactors known assmallmodulereactors(SMRs).
BritishcompanyRolls-Royce has been selected as the country’s preferred partnerfor SMRs, whichare effectively containerizednuclearreactors designed tobe manufacturedin a factory. Many include passive cooling techniques, which supporters argue makes them saferand cheaper.
Nuclear has long come under fire by environmentalists due to radioactive waste and disasters like Chernobyl. Indeed, the U.K.’s first commercial plant Windscale became its worst nuclear accident in history when it melted down in 1957.
On October 10, 1957, Windscale became the site of the worst nuclear accident in British history, and the worst in the world until Three Mile Island 22 years later. A facility had been built there to produce plutonium, but when the US successfully designed a nuclear bomb that used tritium, the facility was used to produce it for the UK. However, this required running the reactor at a higher temperature than its design could sustain, and it eventually caught fire. Operators at first worried that e
Photo: George Freston | Hulton Archive | Getty Images
Most SMRs use light water reactor technology – think of the planned large-scale nuclear plant Sizewell C, just “shrunk down,” saidAbeysundra – which is tried and tested.
Otherdesigns,known as”advanced”reactors,are moreexperimental. For example, those that change the cooling solution or solvent,which istypicallyusedin the process ofseparatingand purifyingnuclear materials.
TheU.K.’sfirst SMRwill be at Wylfa, in Wales, though no timeline has been given for its completion. The site will housethreeSMRs andgrow over time.
In September, the country signed a deal with the U.S. to enable stronger commercial ties on nuclear power andstreamline licensing for firms that want to build on the opposite side of theAtlantic.
However, “the first thing is, there is not,at the moment, a single SMR actively producing electricity under four revenues. They will all come at best in the 30s,”Ludovico Cappelli, portfolio manager of Listed Infrastructure at VanLanschotKempen, told CNBC.
WhileSMRs are a “game changer”thanks to their abilityto powerindividual factories or small towns, their days of commercial operation are too far away, he said.From an investment standpoint, “that is still a bit scary,”he added.
To secure the large baseloads needed to offset the intermittency of renewables, “we’re still looking at big power stations,”added Paul Jackson,Invesco’s EMEAglobal market strategist.
SMRs “probably” dohave a role — “they can clearly bemore nimble” — but it will take time to roll them out, Jackson said, casting doubt on the U.K.’s ability to be a leader in nuclear, as France and China arealready miles ahead.
The U.K.government bodyGreatBritish Energy-Nuclear is set toidentifysitesfor anadditionallarge-scaleplant,havingalreadyacquiredone inGloucestershire, in the west of England,as well as the site in Wales.
“We are reversing a legacy of no new nuclear power being delivered to unlock a golden age of nuclear, securing thousands of good, skilled jobs and billions in investment,” a spokesperson for the U.K. government’sDepartment for Energy Security and Net Zero told CNBC.
“Sizewell C will deliver clean electricity for the equivalent of six million of today’s households for at least six decades, and the UK’s first small modular reactors at Wylfa will powerthe equivalent ofthreemillion homes, bringing energy security,” they added.
Innovation in funding
The U.K. has a strong legacy to build on.Itpioneered fresh funding mechanisms tomakelarge-scalenuclearprojectsinvestibleso thattheyare less reliant on direct government funding, such as aContractfor Differences, which was used forHinkleyPoint C.
The mechanismguarantees a fixed price for theelectricity generated overa long periodof timein order tode-riskinvestmentsin an industrythat’sknown for running over time and budget.Hinkley Point Cwasinitiallyexpected to cost£18 billion (over $24 billion) butthebill hasslowly crept up.
“Thatfixesone part of the equation, the price risk,” Cappelli saidof nuclear investments, but the second risk is construction delays.
The Regulated Asset Base (RAB), first used for nuclear at Sizewell C,attemptsto reconcile this.Investors get paid from the day they cut a check for a nuclear project,rather than the day it startsoperating. Sizewell C is expected to cost£38billionto build.
Privatemarketinvestors are increasingly interested innext-generationnuclearas a way tooffset soaring energy demands from AI, resulting in a host ofyoungcompanies trying to build out facilities.Perhaps themost famous isOklo, a U.S. firm that was taken public by a Special Purpose Acquisition Company (SPAC) founded by OpenAI’s Sam Altman.
Rendering of a proposed Oklo commercial advanced fission power plant in the U.S.
Courtesy: Oklo Inc.
The U.K.’s advanced modular reactor hopefulNewcleo, which useslead for cooling,moved its headquarters fromLondon toParis in 2024 — a strategic moveto deepenits European footprint.At the time, it told World Nuclear News that it still plans to have a commercial reactor up and running in the U.K. by2033, but the firm has sincescaled back itsBritishefforts.
Meanwhile, Tokamak Energy andFirst Light Fusion call the U.K. home. They both focus on nuclear fusion, the process of generating power by combining atoms, though this technology is yet to get out of the lab. All of today’s nuclear power comes from fission, where atoms are spit. The U.K.announced £2.5 billionfor a world-first fusion prototypeinJune.
The next generation of engineers
The U.K. faces challenges in access to relevant talent,which is crucial for scalingprojects effectively. The country isheraldedfor its world-class universities and technicalknow-how, “but that is very much book knowledge,”said VanLanschotKempen’s Cappelli.
“What we need is real on-the-groundexpertise, and that we areprobably lackingfor the simple reason that wehaven’tbeen doing it fora very longtime,” he said.
ForAbeysundra,there’sone area where the U.K. stands out: its mindset.”There is so much knowledge, innovation, and that can-do attitude, which I don’t see as much in other nations,” she said, pointing to the U.K.’s trailblazing role in the Industrial Revolution and establishment of offshore wind energy.
The U.K. government positioned nuclear energy as a key element of the future clean energy workforce in itsCleanEnergy Jobs Plan released in October, whileits national roadmap for nuclear skills, set out in 2024, focuses onapprenticeships, PhDs and upskilling mid-career workers. Industry-led initiatives such as theEnergy Skills Passport also support the likes of oil and gas workers to gain green skills.
Securing the supply chain
Perhaps the toughest issue,however, is the supplychain.
Uranium, the fuel used tomakeanuclear reaction,is dominated by just four countries, including Russia.Global demand foruraniumcould risebynearly athird by 2030 and more than double by 2040, according to the World Nuclear Association, adding further relianceon a select few countriesand pressure on developers.
The U.K. government hasallocatedfunding to build up thesupply chainand has committed topreventing the import of nuclear fuel from Russia by 2028.Fuel for Sizewell C will come fromEuropeanor “Western suppliers,” Cappellinoted.
However, for him, it poses the question: How secure is nuclear energy really? “We have to build nuclear power plants, but we need to build the value chain,”Cappelli added.
Workers, expertise and funding are required for nuclear energy, but the supply chain is also key, he said. Otherwise,there will be”the sameissues that we had with gas,” a nod to the U.K.’s reliance on just one supplier.Instead of gas, it will bewith uranium.
Correction: A key point in this article has been updated to reflect that the U.K. is targeting 25% nuclear energy by 2050.